Noel Ahern (Dublin North West, Fianna Fail)

I thank the Deputy for raising this matter. A new provision was included in the Planning and Development Act 2000 — section 34(4) — enabling local authorities to add a condition to a planning permission relating to maintenance or management of a proposed development, including the appointment of a person or body to carry implement it. The primary objective of this measure was to give a legal certainty to the existing practice of planning authorities requiring the establishment of management companies. This helps to ensure good and prudent management of estates following their completion.

It must be emphasised that the provisions in question do not detract from the primary responsibility of developers to finish developments. Planning authorities have extensive powers under the 2000 Act to make developers finish estates in a satisfactory manner in accordance with the planning permission. In addition, local authorities can now be required to take in charge the public services for residential development when requested to do so. It is important to note, however, that taking in charge relates to the public infrastructure like roads, sewers and so on. Management companies have a very different remit. They deal with the on-going maintenance and management of the private elements of housing developments, such as looking after the green areas, landscaping and maintaining community amenities and so on. This is ultimately the responsibility of the property owners, just as any house owner has to take responsibility for maintenance of his or her house. The general issues that management companies must administer on an on-going basis would never have been the responsibility of the local authority. The existence of a management company, controlled by the home owners, is critically important in the case of apartments, which need arrangements to deal with common facilities or structures. I note the Deputy agrees with this point.

In Ireland, the shared legal responsibility is provided for at present through a requirement, when apartments are sold, that the owners become members of a management company for the complex. Other conditions are also put on the sale of properties, for example, the payment of charges to cover ongoing maintenance of the communal parts of the building and a sinking fund to cover future costs. Apartment complex management companies are generally constituted as companies under the Companies Acts. The members are the owners of the apartments. The operation of these companies, their memorandum and articles of association, the employment of any property manager or management entity, then becomes a matter for the apartment owners. Recent problems have arisen in regard to the management of apartment complexes, such as the adequacy of maintenance and cost of service charges. In many cases, these relate to managing agents contracted by the management company.

A Law Reform Commission working group is currently drafting a report on the law in regard to management of apartment complexes and other multi-unit developments. I understand it has already suggested certain changes in the application of company law to management companies for multi-unit developments to the Company Law Review Group which operates under the aegis of the Department of Enterprise, Trade and Employment. Where the Law Reform Commission report identifies any change in the legislative framework to enable management arrangements to operate more effectively, these will be considered by the Government.

I accept there is much concern about management companies. I hope the Law Reform Commission comes up with answers in its report. I will discuss with the Deputy the points raised by her in regard to house-only estates. However, it was always the case that the footpaths or roads in some private estates were not up to standard despite the estates being deemed to have a management company. I do not know whether this is still the case but I accept that many people are walking into similar situations with their eyes closed.

In many cases, residents do not exercise their rights. When an estate is finished the residents are the management company. However, while they could remain in full control of many aspects of maintaining the property and are entitled to set standards at an annual general meeting, they often hand over responsibility to a management agent. I will check some of the points made by the Deputy with regard to house-only estates if she will provide me with the names of the estates. It may be that the services were not up to standard.

I accept this is an issue of major concern. We eagerly await the report of the Law Reform Commission.

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